Pilot Shortage: Real or Nah?
 

Obviously there is not a pilot shortage at the big leagues, but rather a squeeze on labor at the regional level due to relatively high minimums for poor pay.

However.

Is there any precedent or reason to believe competitive minimums for major airline gigs will come down as the retirements continue?

I'm cautiously optimistic that there is going to be lots of opportunity in the years ahead, but I can't help but feel that with lots of qualified pilots coming out of the wood works (former airline pilots that left and coming back, military fixed- and rotary-wing pilots leaving the service in droves, collegiate aviation grads, pilot mill CFI puppies, etc.), apps are just flooding majors making the jobs just as competitive as ever.

Discuss.

It will never be easy to get a job at Delta, UA, AA etc. There will always be a 3 mile line for those jobs.

That's pretty much all that matters.

1500 hr rule
 

Don't forget too that unlike every boom in the past, this one is different as there is a major hurdle from the supply side that didn't exist in the past.

The 1500 hr rule of course

Remember over the next decade, 2/3 of all AA pilots and 1/2 of all UA and DL pilots will retire. Rarely has any occupation ever seen that high a percentage of retirements.

Not saying getting a job at any of the big 6 will ever be a cakewalk. But the vacuum cleaner suction will greatly shorten the stack of qualified pilot resumes in the in basket. It already has.

If the "pilot shortage" really does happen the first people DAL, AAL, and UAL will hire will probably be pilots from the ULCCs and LCCs. After all, they're the biggest direct threat/competition.

Look at Piedmont and Frontier. Apparently Frontier loves some Piedmont pilots. If AAL was really desperate they could immediately start hiring pilots from Frontier.

The same thing with JetBlue and United. Etc. Etc.

Say what you will about them hiring military pilots. If a shortage really does happen, and it's as desperate as everyone says, poaching from other pilot groups will be the telling sign.

Until then, it'll be easier, but not easy. (just my opinion of course)

I just look at the numbers. In the next decade, there’s something like 30,000 pilots retiring at the majors, but there’s only about regional 20,000 pilots. Some of which won’t jump ship. And those are just for retirement, not accounting growth.

Disclaimer: I don’t have the exact figures in front of me so those are rounded numbers. Don’t kill me lol

No, there is no pilot shortage.

Nope, no shortage..the “shortage” became a huge talking point when the 1500 hour rule was imposed and airlines that paid low wages were making excuses why they couldn’t find qualified pilots willing to fly on food stamps anymore.

Yes there are a lot of retirements on the horizon, but I think the only shortages you will see will be at the regional level.

Yet hiring away their pilots would make the situation worse, not better. Because those pilots would be replaced by new - more junior - pilots who would be costing the ULCC/LCC even LESS money because they would be more junior and even lower on the Payscale.

A lot of people seem to believe that the majors actually WANT to populate. Their pilot group with 25 year olds so they wouldn’t have to find a replacement for 45 years. Well they don’t. An initial type-rating is actually pretty cheap, not a whole lot more money than annual recurrency training. And it isn’t as if a 25 year old pilot would only get one type rating during his/her career at a major. Recruiting replacement pilots is not a major expense either. If major airlines really had their druthers, they’d probably take nothing but 45 year old retired military pilots, some one who already has one pension and government provided health care. Somebody with a long history of NOT being in a union.

Then they’d have them be an FO for ten years, upgrade them for their last ten years, then give them their gold watch and send them on their way. They’d only be at the top rung of the salary ladder for eight of those years, whereas someone hired at age 25 would spend 28 years there. Do the math. The ANNUAL savings in pay woukd more than cover the costs of providing ‘new’ retirees with a type rating. And that’s REALLY why the legacies will fall all over themselves to take some 45 year old retired O-5 or O-6 with less than 2500 hours who flew an A-10 until he made major and then flew a desk for the past 10 years over someone with 2500 hours of 121 time from one of their own regional feeders.

It’s not like they need to hedge their bets they may need to bomb or strafe someone, it’s that they are making money on the regional pilot right where he is, and a succession of retired military old farts will keep the payline down.

And yeah, while they are really not above hiring away some people from an ULCC, what they would really like to see is those people stick around long enough that the demographics of the ULCC become - like that of the legacy - MORE SENIOR so the ULCC won’t have near as much of a payroll advantage. Bad enough that a 12 year legacy captain costs 50% more than a 12 year LCC captain, but the AVERAGE pilot at an ULCC may only be at the three year point in pay while the legacy has thousands of senior pilots and an average seniority if 20+ years.

With both airlines flying the same equipment and buying fuel from the same vendors a more junior workforce is the big advantage the LCC/ULCC has.

Yep
 

The dogs!t carriers are definitely feeling the pain.

I’m lovin’ it!!

Actually, the shortage is very real for a number of reasons.
The first was due to the 1500 hour rule. It created a gap in available labor. Each year a number of pilots would reach 250 hours either through college or on their own. The regional airlines - which historically hired at around 2500-4000 hours to fly Beech 1900’s had been chipping away at wages, benefits and working conditions causing fewer and fewer pilots to enter as a profession. As the compensation lowered so did the entry requirements until they were essentially hiring ink wet brand new commercial pilots into fairly large transport category regional jets as their first job since flying Skyhawks and archers. This only lasted a few years... basically 2006-2011. Historically it had always taken considerably more hours before being hired to fly jets at a part 121 airline. An accident in 2009 drew national attention to how low the experience level had dropped to and legislation changed the requirements to obtain an ATP which now requires additional experience and more specialized training than it previously did. They also changed the 121 reg from requiring CMEL for a First Officer to requiring an ATP. What we all call the 1500 hour rule is more accurately described as the ATP rule since the ATP is what is required and it may be obtained at various total hours.
When the ATP rule went into effect it created a 4 year dry spell. We are now back to where we were before with a fresh supply of eligible pilots being produced each year.
That shortage - and the current one - were caused by the low wages, low benefits and poor working conditions keeping otherwise eligible pilots from taking those jobs. As wages, benefits and working conditions improved pilots returned to accept those jobs.
So where is the shortage now then?
From a legal standpoint with age 65, 41% of all active commercial pilots retire in the next 10 years. Over the past 3 decades there has been a 30% decline in licensed pilots according to the FAA. Boeing forecasts that there will be a need for 790,000 new pilots from now to 2037. That’s an average of 43,888 needed each year globally. The US major airline retirements over the next 10 years is over 30,000. That’s 3,000 a year.
Will the Delta, United, American, UPS, Fedex ever have a pilot shortage, no. But every other job under them will feel the pinch in various ways. To get those few legacy jobs you’ll still have to differentiate yourself from the thousands applying to get in. Hardest hit will be the regionals and smaller charter outfits. LCC will see significant pay, benefit and working condition improvements to keep their pilots from leaving to the legacy jobs. This will - and already is - making places like JetBlue, Spirit, Frontier, Allegiant, Kalitta & Omni very viable career alternatives. This trend will only continue. Last will be regionals. They will expand their preferential hiring and flow through programs with their mainline partners rather than increase wages and working conditions. Eventually they’ll be forced to, but that’s still a while away and with planes like the A220 much of the profitable longer regional flying routes will be pulled back in house to mainline to allow the regionals to shrink without cancellations.

There Ends my crystal ball.... for now

Some reference

https://www.freightwaves.com/news/co...commerce-world

I totally agree with you. I find it so ironic that we get our "thousands of hours of experience" striving to differentiate ourself with training dept, flight ops dept, union work, volunteer.. Flying their pax so we can one day be good enough to.... Wait for it.... Fly their pax!

Case in point, I was at WAI last spring and said hi to American, the gal looked at my resume with 2 masters degrees and 3.5+ gpas during all college/grad coursework, training dept, union & community volunteer work, 1400 121 tpic (a good portion of which was gained flying AA ticketed pax) and told me to look around at everyone else at the table area and find a way to differentiate myself lol.. Handed me my resume back and that was that. Being the snowflake that I am, I was demoralized and mildly humiliated. :D

What you're saying makes total sense

To your point --

Everyone looks at the retirement numbers at the majors and says "Wow, there are over 30k retirements over the next decade with just over 20k regional pilots, everyone will have a job."

But.

How many U/LCCs pilots have their apps in? How many corporate or former airline pilots are joining the regionals now to prime their resumes with current 121 time for the legacies? How many Air Force, Navy, and Marine jet pilots are leaving each year to take those jobs?

There certainly is opportunity - it isn't stagnant by any means. However, it's just as competitive as ever.
I think most everyone with a clean record and well-rounded app will be able to move beyond a regional if that's their goal, but you may have to settle along the way.

Of course they will come down.
Supply. Demand. Simple economics.

The question is just how much and how it will echo through the food chain. The majors can pretty much snap their fingers and get plenty of acceptable candidates. Think the bigger question is what happens if regionals/LCC can't staff themselves.

There is a shortage coming, but it’s not here yet. The big hiring spree and pay increases at the regionals were a result of the factors that rickair777 mentioned above. Give it a couple more years before things really start to pick up. It’s all a guess though as to how the majors decide to handle it i.e. flow, training programs, bringing routes in house etc.

There are a ton of retirements on the horizon, but the number of replacements isn’t a static list. There is a kid out there with a brand new drivers license who could be a competitive applicant at the legacies in 10 years. The business plan could alter demand for pilots as well. Increased passenger loads could lead to reduced frequency on larger planes, affecting the demand for crews. I don’t think that the sky is falling by any means, but there has never been a better time to be starting out than right now. Of course, compared to what we just came out of, everything looks good.

Which Legacy has captains costing 50% more than LCC Captains? I’m guessing Southwest and JetBlue are the two main LCC and they both pay 12 year captains ~$270/hr vs. The Legacies paying ~$285/hr for the same equipment.

Maybe 1,500 out of 15,000 at any given Legacy are WB Captains costing 30% more than LCC Captains but still not 50% more. The majority of Legacy captains cost about 5% more over LCC captains if we are just talking straight pay scales.

I’m not trying to be pedantic, just seemed like 50% was way too large of an over reach.

Exactly. It’s not as if no one else is going to become a pilot in the next decade and it’s a finite list of pilots to backfill the retirements. You make some other great points above too. Just a small example, the USAF is trying to up it’s pilot production from about a 1000 a year to 1500. In a decade, all those “extra” guys will start being at their ADP (airline decision point) too. If The industry remains stable and pay is good, people will invest time and $$$ to become pilots and there will be no “dire” shortage.

There are fewer people wanting to enter this profession and others that require a large personal and financial input before any chance of seeing a reward. There is a different culture now. I’m not going to call it entitlement, millennial, or anything like that, but there is a different mindset now. The industry will eventually be forced to adapt. Until that happens, life at the regionals is going to stink, and life at the legacies is going to be gravy. The concessions are over, it’s time to get paid and claw back what we gave up over the years.

As much as I'd like this to be true, classes at most the regionals are full and backlogged. It's financially justifiable nowadays to pursue it and I think there is enough desperation in the american system nowadays it drives people to take on huge risk, which the airline career is. Many of my coworkers are millennials. They are showing up in suffcient numbers but perhaps not as much as in prior generations. Still, filling the ranks is a drop in the bucket. I think 135 and the bottom barrel 121 are the only ones feeling the pinch. Will that change? Anyone's guess. The regional hiring mania of 2014-2018 has seemed to cool off.

No pilot shortage, but lots of movement. Some good observations, and theories, but what anyone has failed to mention is the effect of the economy going forward. One big economic downturn and all those retirements will be matched by downsizing of the industry, and pilot hiring will slow.

Granted, there are pilots willing to move on that’s not at the LCCs, but those numbers don’t include growth. 1%, 2%, or even 3% growth will require about 40K-55K in hiring (retirement + growth). Food for thought

Not talking straight payscales, talking what they are actually paying. Take Spirit. They’ve basically only been a player since 2007 and really didn’t start expanding until 2014. Very few of their pilots have anything like 12 years seniority. Yeah, their 12 year pay might not differ that much from that of Delta or United, but damn few of their captains and even fewer FOs are at those lofty seniority levels. JetBlue too. Their major expansion started about 2010.

Lots of pilots with very little time at the company mean reduced crew costs. A Delta 20 year captain and 12 year FO cost ( counting 401k) well over $500 an hour to fly a 320. Spirit with a five year captain and a 3 year FO costs about $350 an hour to fly the same equipment.

A newly hired crew is a cheap crew.

I referenced Southwest and JetBlue because you said LCC 12 year captains cost 50% less than 12 year Legacy captains. Spirit is considered a ULCC like you mentioned in your first post so I know you know the difference.

I’m talking about your statement of LCC Captains costing 50% less. SWA is 40 years old and JetBlue is 20 years old plenty of the captains are on year 12 pay. 401k contribution is the same at JetBlue and Southwest too. So same ~$500/hr to operate the 320 or 737.

Also, almost 1/3 (4,000/14,000) of Delta’s pilots have only been on the seniority list for 5 years or less. Newly hired crew as you call it.

As a former CPZ brother (correct me if I’m wrong) I’m not trying to bust your chops on this or be THAT guy. I just wanted to point out LCC’s like SWA and JB don’t have captains out here flying around at a 50% discount compared to our legacy counterparts. That’s all.

I’ll concede that I wasn’t thinking SWA, more JB, Spirit, Frontier, and soon to be Moxy-whatever.

But my point was that the new (and newly expanding) airlines do CURRENTLY enjoy an advantage and that while yes, they have some junior people on board, as the upcoming retirement wave demonstrates, they’ve had a lot of pilots that have been in the top of the payscales for a long long time. And yeah, 50% was undoubtedly a little hyperbole.

Not criticizing anyone, just looking at the demographics and the resulting economics. And ten years from now most of the legacies will have a far less senior demographic, precisely because of those retirees. Read a business article a few years ago about the effect of the increase in retirement age from 60 to 65. One of the things it did was rather dramatically increase the average longevity (and hence the average personnel costs) since almost all those retained were super senior.

The savings in training costs by having people work five years longer were a blip compared to the increase in personnel costs that the increased seniority cost.

The accountants at management no doubt read the same article. Which is why, I believe, they are just as happy to keep flows and preference programs as slow as they believe they can. Your opinion may vary....:D

No big deal, it’s pretty common for people to lump SWA with the Legacies and JB with the ULCC. But I’d say, between the two of them, they are the only true LCC in the US (even though Delta is probably the only airline that consistently comes close to matching the product at JetBlue). Neither is a legacy or an ULCC.

JB was lagging while waiting on a contract but now that one is in place the payscale and retirements are identical to SWA and about 3-5% behind the legacies operating the same equipment. We will be continuing to work to close that small gap that the legacies currently have on us.

Bonus points for using the word “pedantic”. Didn’t know what it meant, looked it up, turns out I might be a pedant. Also, I think you’re being a tiny bit pedantic. But I’m glad. Because I learned something from the ensuing discussion.

By the way, nice dialogue SaturnV and excargodog. I mean that sincerely. If everyone on the forum could parley back and forth without things escalating out of control while showing sound logic and conceding points when need be... why, the world would be a better place. Well done.

Shut the **** up.

Sorry, it was getting a little too un-APC for a minute. ;)

Amem brother.

Why does everyone have to be so snarky? Thanks for keeping it civil guys.

Classes are full, but the airlines aren’t growing. The sucking sound from the top is still in many cases almost more than they can hire.

Absolutely is a shortage. It’s still a pay shortage. In a few more years it becomes a physical shortage.

I made 92,000 my first year. What pay shortage?

Must fly for EDV.

Nope. Different regional.

How much of that was new hire bonus? Regional life these days causes this weird phenomenon where 2nd year pay is way less than 1st year pay.

Something like 26k.

Looking at roughly 82k my second year.

Air Wis or TSA then lol

This is why people are returning to the profession. Not all regionals have increased their pay appropriately, and they're still having trouble filling seats fast enough to replace what they lose each month. The Quality of life still hasn't improved and many bail their first year. Several still run bonus payments that leave them making less their second year than as a new hire, while the rest have finally changed the actual step pay rates.

Exactly, without the bonus an FO is at $50 an hour with a 75 guarantee. That's $45,000 a year min guarantee. That is still too low to attract existing licensed and capable pilots back to the profession. Yes, you can fly your tail off and earn much more, but then you have no life outside of work.
Most folks I know work to live.... not live to work.